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Thoughts on President Obama’s State of the Union

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The most surprising aspect of President’s Obama’s State of the Union speech last night was the fact that he did not mention Obamacare until he was 40 minutes into it. When he did bring up Obamacare the President did not embrace it, but instead seemed almost apologetic about it.

I think this is a clear sign that the President knows that support for Obamacare is quickly eroding and that it will be a political liability heading into the mid-term elections. This means that Maine’s policymakers should back off of Obamacare’s Medicaid expansion scheme. Clearly Obamacare is in for a major overhaul, if not repeal, so that alone is reason enough for why Maine should not rush into Medicaid expansion.

Of course, one of the other major reasons for expanding Medicaid in Maine is to take advantage of the “free money” from Uncle Sam. Yet, Uncle Sam is still running historically high budget deficits and the debt continues to grow (now over $17 trillion, or $17,000,000,000,000). The President did not put forth a spending reduction plan to get the deficit to zero anytime soon (though he did raise taxes 13 times in 2013). As a consequence, Uncle Sam will be faced with growing interest payments on the federal debt which is a ticking economic time bomb.

Maine’s state budget is already being squeezed thanks to Uncle Sam lowering the federal Medicaid match–how long will it take before the deal changes on Obamacare’s Medicaid expansion? Last year, Maine’s policymakers raised the sales tax by 10 percent (to 5.5 percent from 5 percent) and the Meals and Lodging tax by 14 percent (to 8 percent from 7 percent) to pay for shortfalls in the Medicaid system. We simply can not afford to take the risk of another empty promise from Uncle Sam.

Finally, it was nice to see President Obama sing the praises for the role that hydraulic fracturing (or fracking) has played in lowering America’s energy costs and increasing energy security. Not only has fracking created a large number of good, high-paying American jobs, but it is also largely responsible for the growing “on-shoring” of manufacturing thanks to the lower energy costs.

However, I was incredulous that President Obama would try to take credit for fracking. The Environmental Protection Agency (EPA) under President Obama has been no friend of fracking and has pursued a number of witch-hunts to tarnish the industry–such as unsubstantiated claims of polluting ground-water. Also, President Obama could use the bully pulpit to prod his colleagues against fracking bans–such as those in New York–but has not done so.

Overall, I thought it was more telling about what President Obama did not talk about than what he did.